Just to be clear, summer officially lasts through Sept. 22. Yet there's something about August that feels like a long, long, long goodbye. The days are shorter. School kids are getting anxious.
Just try to enjoy that fancy umbrella drink now. Or, you could wipe the sand off your bathing suit, sprint back to your vacation rental and devote what's left of your beach bum money to swimming in stock profit. In that case, a little bit of baby oil wouldn't hurt -- by way of Johnson & Johnson (ticker: JNJ).
"Is JNJ a good buy today? Absolutely," says Hank Smith, co-chief investment officer at The Haverford Trust Co. in suburban Philadelphia. He notes that Haverford has owned JNJ continuously since his company's founding in 1979, which adds up like this: "The dividend yield on their original cost basis is a whopping 250%."
And so, here are five dividend wonders fit for an endless summer:
-- Johnson & Johnson (JNJ)
-- Macy's (M)
-- Citigroup (C)
-- AES Corp. (AES)
-- Texas Instruments (TXN)
Johnson & Johnson (JNJ)
Those who bought JNJ a year ago stand exactly in the same place today: about $131 per share. They also survived a sickening drop of 17% in December, fueled by bad press surrounding asbestos-laced baby powder.
With the stock back on solid footing, JNJ shareholders can rest on a laurel that never seems to go away: its ever-rising dividend. For 56 consecutive years JNJ has boosted the investor payout, which yields 2.7%. In the shorter term, a 66 cent-per-share return in 2013 has since jumped to 95 cents; that's also up from 90 cents just six months ago.
"The company is facing some litigation risk surrounding their baby powder," Smith says, "but we believe this is very manageable and any weakness in the stock based on fears of trial suit losses should be used as a buying opportunity."
Macy's (M)
Over the last year, Macy's has been as hard to love as a crumpled Christmas sweater buried on the holiday clearance table. The escalator down has been relentless, bringing the stock from $39 to just below $23 per share today. Wall Street analysts don't exactly love it, either.
Yet many would contend that big-box retailers have been unfairly brutalized in an e-commerce-crazy world. And that gives Macy's the kind of "buy low," bargain-basement entry point that some experts find attractive.
"Macy's is a contrarian dividend play," says Owen Williams, a portfolio manager for Interactive Advisors in Boston and founder of Williams Market Analytics in Hilton Head, South Carolina.
"Pessimism seems to have been priced into Macy's stock." Williams says. "Macy's checks the boxes for forwarding-looking earnings-per-share estimates, our fundamental evaluation of the company."
Macy's quarterly dividend currently stands at 37.7 cents per share -- up from 25 cents in 2013 -- and equivalent to a 6.6% yield.
Citigroup (C)
Could it really have been that long ago when Citigroup stock had plummeted to the same price as a pack of gum? Actually, it was more like a wad of gum -- but a lot can go right once a recession passes into the rear view.
A decade since its death scare, this major bank has made some shareholders mightily happy. Its quarterly dividend -- valued at a penny as recently early 2015 -- is now 51 cents per share. And the stock? At $72 per share, it's tripled over the last 10 years.
Though C has been flat since July 2018, now could be an ideal time to get in.
"Citigroup sailed through the Fed's 2018 bank stress test without a hitch and was approved for a dividend increase of 41% last year," says Gregory Powell, deputy chief investment officer at Miller/Howard Investments in the New York City area. "Given Citi's good loan and deposit growth, ample capital, improving cost position and stable credit metrics, it's no surprise they've passed the stress test again in 2019."
AES Corp. (AES)
Chances are you haven't heard of this power company, based just outside the District of Columbia. But if you're investor, you've likely bragged to everyone within earshot: AES is up 26% year over year and almost 70% since February 2018, putting its share price just pennies shy of $17.
Investors also get a dividend yield of 3.22%, with that quarterly disbursement now at 13.7 cents a share (more than triple its 2013 level).
"AES is positioned to benefit from rising global energy demand and a shift to renewable energy," says Adam Fackler, senior research analyst at Miller/Howard Investments. "The company's incumbent positioning is an advantage for its renewable efforts as it looks to execute its 'Green, Blend, and Extend' initiative."
That effort will combine renewable and thermal generation power sources, while extending current power purchase agreements.
Analysts see green as well, with three of five labeling AES a "strong buy."
Texas Instruments (TXN)
The technology company that made a big splash in the 1970s with its ubiquitous pocket calculators is poised to stack up numbers of a different sort. Today, Texas Instruments designs and produces semiconductors that it sells to electronics designers and manufacturers.
"TXN enjoys long-term secular growth drivers, a diversified revenue base and disciplined capital management, which should drive continued strong dividend growth," says Nicholas Getaz, co-lead portfolio manager at Franklin Templeton Investments' rising dividends strategy team in New York.
TXN's dividend represents a 2.4% yield and while that may not sound sexy, add this up on your fancy calculator: The quarterly payout of 77 cents per share has multiplied more than six-fold since 2011. The current share price of $128 has risen 13 percent year over year and doubled since July 2016.
Analysts are bullish on the whole, with eight calling TXN a "strong buy" and 15 others a "hold."
